PARIS, Nov 23 (Reuters) – LDC (LOUP.PA), France’s largest poultry group, will have to raise its prices by about 10% next year to cover energy and other costs, after already raising prices up a third from last year, the company said Wednesday.
Food prices in France rose 12% year-on-year in October, making food the main contributor, alongside energy, to overall record inflation in the euro zone’s second-largest economy.
LDC has obtained price hikes totaling 35% from supermarkets over the past 18 months, which should cover the additional costs caused by a rise in the prices of grains used in poultry feed, chief executive Philippe Gelin told reporters during a presentation of the results of the first semester.
The price increase supported a 14% increase in group sales, even as volumes fell due to a bird flu crisis in France, and helped keep LDC’s operating margin stable, the group said. .
As grain markets have slowed, LDC has focused on absorbing higher energy costs after negotiating 2023 electricity prices that were more than three times what it paid this year, Gelin said.
Including the impact of energy costs on farmers’ suppliers plus other inflation factors such as packaging, LDC expected to face an additional burden of 260 million euros ($269.46 million), which could be met by an increase about 10% of poultry prices, he said. She said.
Poultry remained the cheapest meat category in French shops as other livestock sectors also saw high inflation, but LDC reacted to inflationary pressures on households by launching a budget range in September, it said.
This year’s avian flu crisis was not expected to disrupt LDC’s end-of-year holiday poultry supply after it shifted production from the hardest hit areas in France and as a new wave of outbreaks is been more limited, Gelin added.
Foie gras producers, particularly hard-hit by duck flock losses during the disease outbreak, have warned that the pate specialty will be rarer and more expensive this year.
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Reportage by Gus Trompiz Editing by Bernadette Baum
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